Monopoly Power, Price Discrimination, and Access to Biotechnology Innovations

The private sector has dominated the development and delivery of transgenic, or GMO, crop varieties in all countries except China. The commercialization of GMOs has been highly concentrated. Just four crops (cotton, soybeans, maize, and canola) account for virtually all of the GMO area; 97% of world area occurs in five large countries, and 96% of world investment occurs in industrialized countries (James, 2002). Because GMOs originate in the private sector, they are subject to intellectual property (IP) protection. This confers limited monopoly power to innovators and affects research and development (RD Jefferson-Moore & Traxler, in press; Oehmke & Wolf, 2004; Qaim & Traxler, 2005), but the effect of price discrimination has not been examined within this context. At present, the majority of biotechnology investments occur in developed countries (Table 1), and about 70% of that investment is from private sources. Few developing countries currently have access to biotechnology products, and virtually all biotechnology products used in developing countries today are spillovers from developed countries.